• Fri. Dec 8th, 2023

Car Auto Insurance

It's My Car Car Auto Insurance

Agency says car insurance in some Ontario cities has spiked since 2021, may keep climbing

Open this photo in gallery:

Insurance agency Ratesdotca found the average 2023 car insurance premium in Toronto was $2,325, compared with $1,953 in 2021 and $2,201 in 2020.Fred Lum/the Globe and Mail

Supply chain issues and inflation have caused auto insurance rates to spike by as much as 37 per cent in certain Ontario cities since 2021, according to insurance agency Ratesdotca. And if those factors persist, they could go even higher in coming years.

The company’s annual report found the most expensive city in Ontario for car insurance is Brampton, where average premiums reached $2,707. That figure is a 37-per-cent increase from 2021, when insurance rates dipped because of lower driving activity during the pandemic. But it’s also slightly above the average price of $2,698 in 2020, when insurance premiums were still high.

Ratesdotca found the average 2023 insurance premium in Toronto was $2,325, compared with $1,953 in 2021 and $2,201 in 2020. In Mississauga, insurance rates are lower than 2020 levels: Average rates are currently $2,311, compared with $2,372 in 2020.

Daniel Ivans, an insurance expert at Ratesdotca, said auto insurance rates are also increasing in other Western countries as supply chain bottlenecks create a scarcity of cars and replacement parts, while inflation drives up the prices for labour and materials. Increasing claim numbers are also pushing up premiums as people drive more.

“Canada’s actually behind in terms of insurance rates. We’ve seen over the last few years abroad in places like the U.K. and U.S. there have been significant increases,” said Mr. Ivans, who warned rates could rise even further to align with increases seen in other countries.

“This is not an Ontario-specific issue or a Canada-specific issue.”

Mr. Ivans said the Financial Services Regulatory Authority of Ontario (FSRA) has already approved many applications from insurance companies to hike their premiums this year, with some companies being approved for hikes of up to 15 per cent.

FSRA spokesperson Russ Courtney said in an e-mail that those approvals don’t necessarily affect all customers at a given insurance agency, and said premiums today are generally at a level close to before the pandemic.

However, he agreed that economic factors are pushing up the operating costs for insurers.

Will my insurance cover a shattered sunroof and would my rates increase?

Ontario insurance change could cost drivers tens of thousands if they opt out

“Although we can’t predict where the global economy, inflation, and supply chain pressures will be in the future, we have seen the cost of auto insurance impacted by changing market conditions,” Mr. Courtney said.

“Many factors are driving costs up including inflation and its impact on auto parts, the rising cost of labour, supply chain disruptions and the fact that there are more vehicles on the road than at the height of the pandemic.”

Meanwhile, the Insurance Bureau of Canada’s director of consumer and industry relations Anne Marie Thomas cautioned consumers that average generated premium numbers such as those by Ratesdotca to do not always reflect the average price that consumers pay, since drivers will often choose rates on the cheaper end of the spectrum.

The IBC said data on the premiums that Ontarians actually pay showed that the average insurance payment in Ontario was $1,767 in March, 2023, which is only a 6.7-per-cent increase from March, 2022.

However, Ms. Thomas said Ontario remains an expensive province for insurance. She said she was pleased to see the provincial government commit to insurance reforms to lower premiums in its latest budget, and said the IBC is ready to work on the issue.

In the meantime, Mr. Ivans and Mr. Courtney said there are many measures consumers can take to decrease their insurance rates, such as installing winter tires, updating their insurance company if their driving habits have changed or shopping around to see whether they can get cheaper insurance.

Shopping around is important because the way that insurance companies determine a coverage price is complicated, and if your profile as a driver has changed, other companies could offer you much better deals.

Mr. Ivans added that devices that monitor your driving habits are also exploding in popularity, and they can be a great way for people to save as much as 20 per cent on their premiums.

Lastly, he stressed the consumers should not try to decrease their coverage as a way to reduce their premiums, as that could be even costlier in the event of an accident.

“There’s a lot of ways to control your premiums, but reducing your coverage and exposing yourself is not the best way to do it,” he said.

link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *